Gone are the days when Seattle’s homeless service providers simply had their funding renewed with the annual budget.

For the first time in over a decade, the city has competitively bid $34 million in homeless services contracts, cutting funding to some providers with long-standing ties to the city.

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“I recognize this is a huge change,” said Seattle mayor Tim Burgess. “But it’s a huge change motivated by the scale of the need we face on the streets of Seattle.”

Burgess said business as usual is no longer an option in the face of the city’s homelessness crisis. At last count, there were 3,857 people living unsheltered in Seattle.

The city received 181 project applications from 57 agencies. Funding has been awarded to 30 agencies, and the city expects those providers to help more than 7,000 households exit homelessness in 2018.

"Next year, we will move more than twice as many people from homelessness to permanent homes compared to this year," Burgess said.

It's a tall order. But Burgess said the projection for doubling the number of people housed comes from providers. He said organizations will be held to clear performance standards, and a portion of funding will even be tied to hitting certain benchmarks throughout the year.

The effort to meet these ambitious goals means the city must change its funding priorities.

Of all the service areas, the city's shelter system will see the biggest shakeup. Funding is being shifted away from emergency overnight shelters — the kind that provide mats on the floor and require people to enter and leave at specific times — towards "enhanced" and 24-hour shelters that provide storage for belongings, services, case management and better access to housing. Only 15 percent of the city’s investment portfolio will go to basic emergency shelters, compared to 56 percent in 2017.

This translates to roughly 300 fewer city funded emergency shelter beds in Seattle. Most of those beds are provided by the Seattle Housing and Resource Effort (SHARE), which is losing its city funding.

According to city documents, SHARE received $791,951 in city funding for shelters in 2017. Their request for funding in 2018, along with a request from their sister organization, was rejected by the city.

The city will make bridge funding available to providers who are losing some or all of their city contracts to make sure shelters can remain operational through the winter, and providers have a chance to get clients connected with other services.

In explaining why some providers did not receive funding in the contract rebidding process, Mayor Burgess said: “There were some applicants in this process who were unable to establish their viability.”

The city is funneling funding to programs that focus on getting people into permanent housing. They've also brought on new providers to address the needs of African Americans and Native Americans, who are over-represented in the homeless population.

For those providers, the city’s funding decisions are exciting.

Colleen Echohawk is the executive director of the Chief Seattle Club, an organization now receiving city homelessness funds. She also serves on KUOW’s board of directors.

She said the competitive bidding process and the city’s new priorities herald a remarkable change for her organization and community.

“We believe it is a sacred responsibility, that we know how to do, to house our own people. However, we’ve never received one penny of the city dollars," Echohawk said. “We know how to house our own people. We’re going to be able to do some amazing work with that [money], we’re going to be able to hire more case managers … We’re going to be able to do more for families.”

In addition to changing the shelter system and committing to reducing racial inequities, the city is deepening investments in rapid rehousing programs, which provide short-term rental assistance in the private market. These programs are seen as best practice nationally, but some are concerned they’ll be less effective in Seattle’s hot housing market.

Providers are not mandated to house Seattle’s homeless within the city, so there are also concerns that rapid rehousing could result in the city’s poor being pushed into the suburbs and surrounding communities.

Extra money for rapid rehousing comes at the expense of transitional housing programs, which provide temporary housing and services in nonprofit run units.

Sharon Lee is the head of the Low Income Housing Institute (LIHI). Her organization lost funding for some of its transitional housing. Lee said she's disappointed and she's skeptical about the city’s shift in focus.

“I think rapid rehousing is totally oversold,” she said. “I think it’s a practice that hasn’t been proven to be successful locally.”

LIHI applied for nearly $900,000 in funding overall. They received just under $550,000. Lee said her group plans to appeal the funding decision. The city will accept and consider appeals over the next two weeks.